TRADE AND INDUSTRY
The Manufacturing Sector
Restructuring of the manufacturing sector was reflected by the drop in contribution of the sector to Gross Domestic Product from 18 per cent in 1990 to about 7 per cent in 1997. In spite of the structural change, the manufacturing sector remained an important sector of the economy. It was Hong Kong's fourth-largest employer, employing 257 042 persons (11 per cent of the total employment) in 1998. Mechanisation, automation and relocation of assembly-type operations to the Mainland have accelerated the development of more knowledge-based and higher value-added manufacturing.
Increasing technological application and innovation in manufacturing industries result in more specialisation and distribution of processes on a global scale. As Hong Kong switches from a manufacturing base to a control centre of an increasingly globalised production network, a large part of the service activities is in fact related to manufacturing during the restructuring of the economy.
The clothing industry was the largest employer in the manufacturing sector in 1998, followed by the printing, publishing and allied industries. Chart 1 shows the breakdown of employment within the manufacturing sector in 1998.
Chart 1: Number of Persons Employed by the Manufacturing Sector in 1998
Others
28.8% (74 010)
Clothing 24.3% (62 333)
Metal Products 5.3% (13 737)
Food & Beverages
7.8% (20 111)
Textiles 6.9% (17 720)
Electronics
9.6% (24 769)
Printing 17.3% (44 362)
Hong Kong's manufacturing establishments are generally small. Of the 23 631 manufacturing establishments in 1998, 22 829 employed fewer than 50 people but accounted for 52 per cent of Hong Kong's total manufacturing employment. Many small establishments are linked with larger factories through an efficient and flexible sub-contracting network. This arrangement has enabled the manufacturing sector to respond swiftly to changes in demand.
The manufacturing sector remains export-oriented. Domestic exports amounted to $188 billion in 1998. Major export items included clothing, electronics, textiles,
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